The events that initiate and promote atherogenesis are not well defined, but sequestration of LDL in the vascular wall at sites prone to lesion development is one. Bound LDL oxidizes to a pro-atherogenic form that is bound by scavenger receptors like CD36, leading to inappropriate intracellular lipid accumulation and foam cell formation. Atherosclerotic lesions can contain Chlamydia pneumoniae, and such infections constitute a risk factor for atherosclerosis. Macrophage infection by C. pneumoniae results in foam cell formation, as does exposure to its purified lipopolysaccharide (LPS). How LPS induces lipid accumulation or stimulates gene transcription is unknown. We find that LPS induces expression of the CD36 scavenger receptor gene in monocytes, leading to enhanced surface expression, and to intracellular lipid droplet accumulation and foam cell formation. CD36 is controlled by the transcription factor PPARgamma, and we find that LPS, unexpectedly, activates a PPAR responsive element (PPRE)-reporter. In fact, LPS activates the CD36 promoter through its PPRE. PPARgamma is activated by lipid ligands; synthetic drugs do this, but high affinity physiologic PPAR3, ligands are unknown. LPS does not bind PPARgamma, so it induced the formation of an endogenous agonist. We find that lysophosphatidic acid (LPA) is a PPARgamma ligand and agonist --providing the first evidence that this might be the long sought after physiologic agonist for this transcription factor. LPA stimulates PPRE-driven reporters, induces CD36 expression, and differentiates monocytes to foam cells. We show this signaling is independent of Edg (surface LPA receptors) signaling in several ways. We find that LPS increases cellular LPA levels, and that metabolizing this intracellular LPA by transfected LPA acyltransferase blocks PPAR7 activation and function. Here we propose to define the way in which LPS induces LPA accumulation, and determine the consequences of LPA activation of an intracellular nuclear hormone receptor/transcription factor on foam cell formation. Knowing the identity of the physiologic ligand has allowed us to establish a high throughput screen for rationally designed PPARgamma inhibitors. One non-hydrolyzable LPA analog blocks PPARy function and might define a new class of anti-infiammatory, anti-lipidic agents.